SPDR Gold Trust (GLD)

[NYBob]

Caledonia Mining achieves new production record at Blanket gold mine
08:12 21 Mar 2018

“The production difficulties which we encountered in the first half of
the year were identified and addressed and it was pleasing to see
that these remedial measures resulted in Blanket achieving consecutive
production records in the third and fourth quarters of the year.”

Gold and dollars
It saw an average gold price of US$1,243 per ounce in 2017
Caledonia Mining Corporation Plc (LON:CMCL) told investors it achieved
a new production record at the Blanket mine, in Zimbabwe, where it
unearthed 56,133 ounces of gold during 2017 - some 11.5% more than in
the preceding year.

The company, in financial results for the year, reported an average gold
price of US$1,243 per ounce (up from S$1,232 in the year before) and it
said gross profit amounted to US$26.32mln, up from US$23.49mln.

Net profit was reported at US$9.38mln, with adjusted earnings per share
confirmed at 135.4p per share for the twelve months ended December 31.

At the end of the year, Caledonia had US$12.75mln of cash and
equivalents, having generated some US$24.5mln in the twelve months.

"I'm delighted to report that production for the year was a new record:
the 56,133 ounces of gold produced in 2017 being 11.5 per cent higher
than in 2016,” said Steve Curtis, Caledonia chief executive.

“The production difficulties which we encountered in the first half of
the year were identified and addressed and it was pleasing to see that
these remedial measures resulted in Blanket achieving consecutive
production records in the third and fourth quarters of the year.”

"In addition to increased production, we have also reduced our unit
costs: Caledonia's AISC per ounce for the year was $847 per ounce -
seven per cent lower than in 2016. The combination of increased
production and lower costs and a small increase in the gold price
resulted in a 14 per cent increase in profit attributable to
shareholders.”

Curtis added: “There were some significant political developments in
Zimbabwe towards the end of 2017 which culminated in the appointment of
the new President.

“The new President has made several pronouncements regarding a
relaxation in the indigenisation policy and specifically the removal of
the indigenisation requirement for gold mining companies.”

He highlighted that the company now intended to proceed with a funding
process to raise US$4mln which will fund exploration and it will,
assuming indigenous investors don’t acquire new shares, see the
company’s stake in Blanket increase above 50%.

The company is also said to be considering options to acquire stakes
from certain indigenous stakeholders, to further increase its direct
ownership of the mine.

"I wholeheartedly welcome the change in legislation which means that
Caledonia can commit new capital so that Blanket can commence
exploration and evaluations of additional projects in Zimbabwe,” Curtis
said.

“If this investment is successful it will benefit all stakeholders,
including Blanket's indigenous shareholders, future employees on the
new projects, the communities around the new projects and the
government of Zimbabwe which would benefit from increased royalty and
tax receipts and greater inflows of foreign exchange arising from
increased gold production.”

Caledonia is described, by Curtis, as being ‘highly cash generative” at
present levels (55,000 ounces per year) and he is confident that this
will improve further as the Blanket operation is expanded up to a rate
of 80,000 ounces per year by 2021.

“Once the Investment Plan is completed towards the end of 2020, we
expect to have substantial free cash flows to deploy elsewhere.
Against this background, there are very encouraging political
developments in Zimbabwe which we are optimistic will create new
investment opportunities,” Curtis added.

http://www.proactiveinvestors.co.uk/companies/news/193530/caledonia-mining-achieves-new-production-record-at-blanket-gold-mine-193530.html

http://www.caledoniamining.com

God Bless